Kmart's bank debt
was bid up last week on anticipation of a debt restructuring.
Levels hit the 95 range early in the week, up from the 90-91 range.
By Friday, the Street market was 95-97. Dealers heard mixed reports
of actual trading, but were skeptical since there were so few
sellers. "There hasn't been a lot of volume--maybe a couple trades.
There's been a lot of bidders but not as many sellers," a dealer
said. Holders are expected to be in a better position with the
restructuring. The retail chain is based in Troy, Mich. Calls
to
John T.
McDonald, cfo, were referred to
spokeswoman
Jack
Ferry, who did not return them by press
time.

The company is refinancing its $1.5 billion
credit facility (see related story, page 1). A dealer explained
that if the company refinances, banks will get security from Kmart.
"If you look at the inventory, there's roughly $7 billion. Even if
it gets liquidated at 20 cents on the dollar, that's about $1.4
billion, and the company's bank debt is $1.5 billion. So this is
worth par. The banks are good to go."